GE Money Talent Management: Change Model Case Study

Overview of GE Money's Recruitment Challenges

The case study identifies four overall challenges discovered by GE Money. First, there was a lack of advertising budget management and overall tracking of spending associated with recruitment. Second, there was an inconsistent process across all client locations. Third, there was a lack of resources to research the best ways to advertise and reach desirable target candidates — including cutting-edge technology and emerging trends in the broader human resources and recruiting sphere. Finally, there was no tracking of return on investment (ROI) as it related to cost per hire; in other words, there was no comparison between the cost incurred per hire and the net benefits produced by those hires.

The prescribed remedy was described as a "comprehensive" or "long-term solution," neither of which was apparently in place at the time. The solution GE Money developed centers on the use of dedicated headhunters who ultimately cost the company less than prior methods. Facets of that solution included shared services recruiters, an off-site sourcing engine, leveraged sourcing tools, expert sourcing knowledge, heavy use of subject matter experts (SMEs), accountability to metrics and service level agreements (SLAs), and reduced reliance on external search firms.

The case study's own data shows that costs related to search firms fell dramatically between 2005 and 2007. In 2005, overall costs stood at $5.3 million. By 2006, that figure had dropped by roughly one-fifth to $4.2 million. It then fell another 79% from 2006 to 2007, reaching $1.3 million (Goldsmith & Carter, 2010).

The Lean Change Model and Sourcing Strategy

As the case study itself states, the core change model GE Money adopted was a "work smarter, not harder" approach. Rather than throwing money at the problem — which would likely have made the situation worse — the organization analyzed how to move forward using a leaner and more streamlined approach that delivered strong results with less expenditure on ineffectual or inefficient methods.

The mechanism through which this was achieved involved lean quality management reviews and the use of kaizen teams, as described in the case study just below figure 6.4. GE Money conducted a top-to-bottom review of the value (or lack thereof) of their existing methods, assessed potential alternatives, and arrived at practices that delivered the desired results with a significantly better return on investment and lower overall spend.

To have overall search firm costs drop by roughly eighty percent from their 2005 peak is remarkable — all the more so because SLAs, metrics, and accountabilities improved simultaneously. The shift also involved moving from disparate, location-specific processes to a single unified process that is more effective and carries lower operational costs precisely because variance from location to location has been minimized.

Inefficient and inconsistent practices should never be the default at a high-performing firm unless the tasks involved genuinely require such variation. In the case of recruiting and human resources operations generally, that rationale does not apply, which is why the prior process needed to be replaced (Goldsmith & Carter, 2010).

Evaluation Methods and ROI Outcomes

In terms of the types of evaluation information that were collected and used, GE Money assessed what was wasteful, what could be done to improve productivity, and what could be done to improve quality. More specifically, they sought ways to increase quality without necessarily spending as much as other methods would require. The results of any given hiring method matter, but the amount of money spent per hire matters equally.

As an illustration: if $10 million is spent on a resource-intensive approach that yields one thousand qualified applicants, the cost per hire amounts to $10,000 — no small sum. However, if the same number of applicants can be identified and hired through a streamlined and targeted process costing $1 million, the cost per hire has fallen by ninety percent and the return on investment improves substantially. In the high-cost scenario, the ROI could easily be negative if a given hire does not perform.

What the case study communicates clearly is that prior recruiting methods were technically functional but were being executed differently from location to location, with overall efficiency that was less than desirable. The transition to a single, unified process addressed that directly and reduced operational costs accordingly (Goldsmith & Carter, 2010).

Conclusion

In the end, GE Money clearly took the right overall path. The shift to a lean, unified, metrics-driven recruiting model produced dramatic cost reductions and improved accountability across the organization. There may well be bumps in the road — particularly around regional legal variation, cultural and demographic diversity, and the temptation to over-correct on costs — that require ongoing refinement of the model. However, the foundational approach is sound. Spending money deliberately, and only when justified by expected returns, is the right operating philosophy. Throwing good money after bad is never workable, but neither is starving a process of the investment it needs to perform at its best.